Head to Head Review: Alcatel Lucent (ALU) vs. Its Rivals

Alcatel Lucent (NYSE: ALU) is one of 65 public companies in the “Communications & Networking” industry, but how does it weigh in compared to its peers? We will compare Alcatel Lucent to related businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Risk and Volatility

Alcatel Lucent has a beta of 2.05, suggesting that its share price is 105% more volatile than the S&P 500. Comparatively, Alcatel Lucent’s peers have a beta of 1.12, suggesting that their average share price is 12% more volatile than the S&P 500.

Profitability

This table compares Alcatel Lucent and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alcatel Lucent 14.83% 86.14% 10.96%
Alcatel Lucent Competitors -3.68% -10.35% -1.29%

Earnings and Valuation

This table compares Alcatel Lucent and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Alcatel Lucent N/A N/A 43.38
Alcatel Lucent Competitors $3.38 billion $382.14 million -135.54

Alcatel Lucent’s peers have higher revenue and earnings than Alcatel Lucent. Alcatel Lucent is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional and Insider Ownership

63.2% of shares of all “Communications & Networking” companies are owned by institutional investors. 13.5% of shares of all “Communications & Networking” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Alcatel Lucent and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alcatel Lucent 0 0 0 0 N/A
Alcatel Lucent Competitors 438 2482 4068 163 2.55

As a group, “Communications & Networking” companies have a potential upside of 13.62%. Given Alcatel Lucent’s peers higher possible upside, analysts plainly believe Alcatel Lucent has less favorable growth aspects than its peers.

Summary

Alcatel Lucent beats its peers on 5 of the 9 factors compared.

About Alcatel Lucent

Alcatel Lucent SA is a provider of Internet protocol (IP) networking, ultra-broadband access and cloud technology solutions. The Company operates through two segments for the networks business. The Ultra Broadband Networks segment consists of Mobile Networks and Fixed Networks business groups. The IP Networks and Applications segment consists of Internet protocol (IP)/Optical Networks and Applications and Analytics business groups. Its other segment consists of businesses run as separate operations (Alcatel Submarine Networks and Radio Frequency Systems (RFS)). The Company offers a range of solutions, including Communications and collaboration, IP Core Routing, IP/optical integration, long term evolution (LTE) Ultra-Broadband, Software-defined networking and Vplus. The Company offers a range of consulting, managed, maintenance and professional services, including Bell Labs Consulting and Build, Operate and Manage (BOM) Solution for Mobility Networks. The main shareholder is Nokia.

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